This week, I am recommending two papers:
M. Todd Henderson (University of Chicago - Law School) has posted Two Visions of Corporate Law on SSRN. Here is the abstract:
In a recent paper, Professor Robert Ahdieh argues that the debate about whether corporate law federalism leads to a race to the top or the bottom is pointless because state corporate law has little to do with the quality of corporate governance. Ahdieh thinks that markets, like those for corporate control and labor, are what make corporate governance what it is, not state competition for corporate charters.
This essay, which will appear in the George Washington Law Review as part of a colloquy on Ahdieh's thought-provoking paper, argues that the race debate matters because while the market for corporate control disciplines managers, it is competition among states that disciplines states from distorting the market for corporate control.
After showing that the race debate matters, the essay then tries to explain the persistence and ideological valence of the debate. Why is it that the debate continues despite innumerable empirical and theoretical studies on both sides, and why is it that defenders of the federalism model are mostly conservatives and critics are mostly liberals? The answer to both questions is that the race debate is really a conflict between two visions of corporate law held by these groups. Using the framework developed by Thomas Sowell, the essay shows how the split in the academic community about the optimality of the corporate law model can be explained by one's faith in experts (what Sowell calls the "unconstrained" vision) or by one's faith in processes, like markets (what Sowell calls the "constrained" vision). The essay then offers some preliminary thoughts on the implications of this description for corporate law scholarship and some ideas on how to move the debate forward.
Originalism and Regulatory Takings: Why the Fifth Amendment May Not Protect Against Regulatory Takings, But the Fourteenth Amendment May by Michael B. Rappaport:
This articles explores the widely disputed issue of whether Takings Clause protects against regulatory takings, offering a novel and intermediate solution. Critics of the regulatory takings doctrine have argued that the original meaning of the Fifth Amendment Takings Clause does not cover regulatory takings. They have quickly moved from this claim to the conclusion that the incorporated Takings Clause under the Fourteenth Amendment also does not cover regulatory takings.
In this article, I accept the claim that the Fifth Amendment Takings Clause does not cover regulatory takings, but then explore the possibility that the incorporated Takings Clause does cover such takings. Applying Akhil Amar's theory of incorporation, I argue that there are strong reasons, based on history, structure, and purpose, to conclude that the Takings Clause had a different meaning under the Fourteenth Amendment. Amar argues that the Bill of Rights was dominated by republican ideas, but that the Fourteenth Amendment was founded on more liberal notions intended to protect individual rights. This would suggest that a broad reading of the Takings Clause would further the principles underlying the Fourteenth Amendment.
Moreover, that some state courts had come to apply takings principles to regulatory and other nonphysical takings in the period between the enactment of the Bill of Rights and the Fourteenth Amendment provides additional support for the possibility that the Fourteenth Amendment enactors would have understood it to apply to regulatory takings. While the paper does not attempt to prove that the Fourteenth Amendment Takings Clause applies to regulatory takings, leaving that task to others, it argues that critics of regulatory takings doctrine should no longer simply assume that the Constitution's original meaning does not apply to state regulatory takings.
Both papers are highly recommended.
